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Exploration


Expenditure on gold exploration totalled $92 million in the March quarter 2015, according to the Australian Bureau of Statistics. This represented an increase of 12% as compared with March quarter 2014. In the 12 months to March 2015, $387 million was spent searching for gold in Australia.

Chart 1: Gold’s quarterly mineral exploration expenditure in Australia

Source: Australian Bureau of Statistics (ABS)

Expenditure on gold exploration represented 29% of total exploration expenditure in Australia in the March quarter 2015, up by 9% as compared to the March quarter 2014. This is also the highest share for gold since June quarter 2006. The share of total exploration expenditure spent searching for gold exceeded 65% in 1997. The subsequent decline occurred in the context of substantially higher investment in coal and iron ore exploration, largely in response to China’s demand for steel-related bulk commodities.

In 2012, 44% of active exploration projects in Australia were primarily searching for gold. Gold exploration occurs in every Australian state and the Northern Territory with Western Australia accounting for 75% of activity. There were more than 2,000 active gold exploration projects in Australia, as at September 2012, plus a further 198 projects at the pre-feasibility or feasibility study stage.

Chart 2: Gold projects of Australian-listed companies by stage, at September 2012

Source: Intierra RMG
Notes: Grassroots – Projects at the earliest stage; where tenements have been granted but have not been explored in any detail.  Specific mineral targets are yet to be identified and tested. Exploration – Fieldwork has been carried out and indications of potential mineralization have been identified.  Advanced Exploration – The project has advanced to the stage where specific targets have been drill tested, resulting in the identification of mineralization (and possibly a JORC defined resource).  Pre-Feasibility/Scoping – A JORC resource has been reported and work is underway to assess the technical and commercial merits of the project.  Feasibility Study – Detailed work is being carried out to fully assess the technical and economic viability of the project.  Concurrently work is being carried out on the social and environmental aspects of the project, with a view of building a mine.  Construction – A decision has been made to build the mine.  Typically it takes 1-2 years to build it. Operating – The mine is in production.


Since 1975, 195 significant gold discoveries containing greater than 100 koz have been made, plus an additional 34 deposits with gold as a by-product. Discoveries were made in all states except Tasmania. Most primary gold deposits were located in Western Australia, and most of the by-product gold deposits were in South Australia. (click here for a list of significant discoveries in Australia)

Figure 1: Location and size of gold deposits >100 koz found in Australia since 2000 Source: MinEx Consulting
Note: Includes primary gold deposits and by-product gold associated with base metal discoveries

The size and number of discoveries has declined significantly over the past decade. Whereas the average size of gold discoveries was 2.2 Moz between 1980 and 1989, it was half that at just 1.1 Moz from 2000 to 2009. The average grade of discoveries similarly halved over the decade.

Chart 3: Estimated total amount of gold discovered by type and deposit size 1975-2011

Source: MinEx Consulting

A key factor behind the declining discovery performance is the shift to brownfields exploration. It is estimated that the ratio of brownfield to greenfield exploration has increased from 1:1 in 2000 to 2:1 at present. Brownfield exploration involves searching more deeply or laterally for mineralisation related to, or in close proximity to, a known deposit and has the potential to add to the life of existing mining projects. Riskier greenfield exploration generally occurs in outside areas of known deposits and is typically the source of the next generation of mining projects.  The longer term consequence of a shift away from greenfield exploration is an eventual decline in national inventory.

While most near-surface gold deposits are likely to have been discovered, it remains the case that exploration has taken place over only about 20% of Australia’s land mass. The remaining 80% of the continent, covered by regolith and sedimentary basins, is largely unexplored due to the depth of barren cover material lying above the rocks that are likely to host gold deposits. This represents an exploration opportunity of more than 7.5 million square kilometres.